purpose

Smart companies trust people

by Andy Polaine on March 4, 2014

in General, Links

I just backed David Hieatt’s upcoming book, Do Purpose on the crowd-funded publishing site, Unbound. David is a smart guy and a kind of serial entrepreneur. The book explores companies that focus on their purpose. Here’s an excerpt:

Most companies don’t have a purpose. This may sound odd but most people have forgotten why they are in business. The founders are dead. The purpose is no longer there. They think it is just to make money. But making money is a result. It is not the purpose. For me, a business that has a purpose is much more energised. It is the wind for the sailboat. It pushes you and the team on. It is the fuel for the journey ahead.

A lot of businesses fail because they give up. They give up because they never had a purpose so when things get tough, they quit. I would say 90% of businesses haven’t worked out why they are in business. I think it’s vital to do so. It’s important to do so because it gives you great motivation. Understand the why. It’s pivotal to your success. Your team needs to understand it. And sooner or later your customer will get what you are about too.

In a recent blog post David writes about smart companies who understand that most people are good:

For me, I don’t understand bad service. Why wouldn’t you be on the customer’s side? Why would you go to all that trouble to get a customer just to let them walk away? Why would you want a customer just once and not for a lifetime? 99% of customers are good people. Yet, all the rules in place are to protect companies from the 1% who aren’t so good.

The best companies have figured that one at. They have realised most people are good. They give them the benefit of the doubt. Smart companies trust.

As someone involved in service design, this is a question I ask about ten times a day. Germany (where I live) and Switzerland (where I work) tend to have excellent infrastructure, which means things like trains (especially trains) and public services work very well. But they also have terrible customer service when things go wrong, which is the time when you need excellent customer service most of all. I’ve lost count of the times companies have acted unreasonably, even illegally, in order to stick to the point of a contract or terms and conditions. It seems so obvious that you shouldn’t treat people this way, especially paying customers, so why does it happen?

The answer is culture and culture comes from a sense of purpose.

There is a phrase often used by managers in Germany and Switzerland, which is Vertrauen ist gut, Kontrolle ist besser!. It roughly translates as “trust is good, control is better.” It is why organisations still insist on using clunky and useless time tracking tools such as SAP, despite ample evidence that it reduces motivation and job satisfaction and thus productivity. If you can read German, my college, Jan-Erik Baars recently wrote a good post about this (or read the rather average Google translation of it).

This culture of trying to constantly monitor what employees do harks back to the mindset of the industrial age. It might make sense when employees give their physical labour, but their mind is theirs to own, but it makes little sense in any kind of service or knowledge working industries in which the mind-body connection is paramount. That is to say, around 80% of developed nations’ economies. We want to interact with humans, not robots. The irony of this phrase used by corporate managers is that it was originally coined by Lenin.

The worst effect of this culture is the destruction of trust and the cultivation of resentment. If I pay for a product or a service and something goes wrong, I want to be presumed innocent, not treated as a potential criminal out to rip off the company in question. Of course, a tiny percentage of people may try to rip off that company, but the cost of being nice is that some people will take advantage of you.

Germany and Switzerland are cultures that love rules. There is a rule for everything possible, which means there are forever exceptions to those rules. That creates a culture of rule adherence at the cost of empathy and common sense. Companies that turn this on its head do not even have to stretch that far. Simply being reasonable instead of pernickety can feel like a breath of fresh air. Imagine what a customer feels like when they are actually treated pleasantly. It feels so great you want to remain a loyal customer forever and tell everyone else about it. The same goes for employers. Assume your staff are reasonable adults and treat them as such and they’ll be loyal. Treat them as potential thieves who need to be constantly monitored and they will act like thieves and try and get away with as much as possible.

Companies that get this right have a sense of purpose beyond just making money and they usually make money precisely because of this sense of purpose. I’m looking forward to David Hieatt’s book and his take on how to achieve that.